Romania's Q1 2019 gov't deficit: 0.5pct of GDP, according to Finance Ministry

Romania's Q1 2019 government deficit is 0.5 percent of the Gross Domestic Product (GDP), while the percentage reported on Friday by Eurostat of 4.5pct of GDP quarterly is calculated against the seasonally adjusted ESA balance by reference to the quarterly GDP, according to the Romanian Ministry of Public Finance (MFP). "With regard to the Eurostat press release mentioning Romania's Q1 2019 government deficit, we need to clarify the following: the difference between the balances mentioned in the Eurostat release and the data published monthly on the MFP website stems both from the calculation methodology, the European System of Accounts (ESA) using the accrual-based approach and the impact generated by the seasonally adjusted quarterly deficit calculation methodology, which is also mentioned in the Eurostat release. It is important to note that the percentage mentioned by Eurostat of 4.5pct of the quarterly GDP is calculated on the basis of the seasonally adjusted ESA balance, based on quarterly GDP, reflecting a trend component of the government deficit reported in previous quarters and against Q1 GDP, a quarter in which GDP is typically lower in nominal value than the other three quarters of the year," says MFP in a press statement. According to the ministry, the implementation of the consolidated aggregate budget according to the national methodology at the end of the first quarter of 2019 showed a deficit of 0.5pct of the annual GDP, that is 5.5 billion lei. "Also, according to data published by Eurostat, it is noticed that the same indicator registered a maximum of 3.6pct of GDP in the first quarter of 2018, but the deficit for the whole year was 3pct of GDP. Hence, that quarterly data published by Eurostat are not likely to explain the annual values. A seasonal adjustment is expected for the next quarters of 2019, so that the government deficit overall will end up at below 3pct of GDP," according to MFP. At the European Union level, Romania had the highest governmental deficit in Gross Domestic Product in the first quarter of this year, with 4.5pct of GDP, whereas in the Eurozone, the governmental deficit was 0.5pct of GDP, and the European Union had a governmental deficit of 0.6pct of GDP, according to data released Friday by Eurostat. Also, Eurostat data shows that Romania was also the leader in the increase of the governmental deficit in the first quarter of this year compared to the last quarter of last year, with an advance of 1.7 percentage points, from a deficit of 2.8pct of GDP to 4.5pct of GDP. Eurostat released data on governmental debt at the end of the first quarter of 2019. According to these figures, Romania was among the member states with the lowest governmental debt level, at 34.1pct of GDP, with a lower level of governmental debt only in Estonia (8.1pct of GDP), Bulgaria (21.2pct), Luxembourg (21.3pct), Denmark (33.6pct) and the Czech Republic (34pct). The public deficit is defined in the Maastricht Treaty as the net financing requirement, as defined by the European Integrated Economic Accounts. The general government sector includes the central, state, local and social security sub-sectors. AGERPRES (RO- author: Oana Tilica, editor: Mariana Nica; EN - authors: Corneliu-Aurelian Colceriu, Gabaroi Bogdan, editors: Adina Panaitescu, Rodica State)